INDONESIAN RUBBER PRICE SURPASSES US$3 PER KG

Medan, Jan 16 (ANTARA) - The price of Indonesian rubber SIR 20 in the international market continued to rise and has reached US$3.12 per kilogram for February shipment due to tight supply and increasing demand, Edy Irwansyah said.

"The US$3.12 price is a quite big hike compared to the price of the first week of January or January 6 when it was still recorded at US$2.97 per kilogram for the same month delivery," the executive secretary of the North Sumatra Association of Indonesian Rubber Producers (Gapkindo) said here on Saturday.

He said the hike followed an increasing demand in the midst of a tighter supply as a result of an increasing crude price and improving economic conditions.

The automotive industry, for example, has already started to revive after demand rose as global crisis has begun to be overcome. "The price is believed to go up again as demand keeps increasing," he said.

Due to the rising export price of the commodity the price of raw rubber also rose already reaching Rp24,000 per kilogram.

A North Sumatran exporter, Tjoe Min Fat, said although the price trend was up businessmen remained cautious to make contracts. "Businessmen are still worried over possible sudden price fluctuations that could hurt them," he said.

The president director of PT Abad&Co. said the rubber price is affected by many factors so that it is very vulnarable to price fluctuations.

He said the price could suddenly drop if it was too high, he said. He admitted that demand from various countries remained high from year to year because rubber is a main material used in various industries particularly automotive.

Rubber traders in Medan, M Harahap, said the price of raw rubber at farmers' level kept increasing and there had been purchse competition due to limited stocks.